Also, the above example assumes level expenses and does not take into account taxes or inflation. 5.498 years will be needed to earn this much.Īs always, keep in mind that real returns are not usually guaranteed, and fluctuations in ROI, especially during the early years of retirement, will affect how long your savings last. In that case, $639,799.25 is the present value of your expenses over the next 12 years necessitating $474,956.95 in salary discounted at the 7% rate (since we're still assuming 7% ROI). If you want to stay more consistent with your after social security withdrawal rate, then we can value the expenses at a 4% rate instead of 7%. Using a salary of $107,172 we find that only 4.1733 years are needed to earn this much. Since we know that the $68,172 yearly expenses will occur each year for the next twelve years, we can find that the present value of these expenses is $541,468.81 at 7 % interest (for more information on how to calculate this look up time value of money and annuity valuation). What we need to figure out is how many years the $107,172 income will need to accrue to provide for twelve years of $68,172 in yearly expenses with $164,842.30 in current savings. That takes care of the period of time after social security, but what about the next twelve years, before social security? According to the above math and the information you provided, you have $164,842.30 in unreserved savings, a yearly income of $107,172, and yearly expenses of $68,172. At 7% interest you would need $714,300*(1.07)^-12 = $317,157.70 in today's money to secure this retirement income.Ĭongratulations! You already have enough to retire twelve years from now. Following the 4% safe withdrawal rate, you will need $714,300 in twelve years to sustain this spending level. After social security, you will be getting $39,600 per year in income from the government lowering your current $68,172 in expenses to only $28,572 that needs to be covered by investment income. We can break your situation down into two time periods: before social security and after social security. I can't recommend any online calculators, but I can do the math for you based on what you've already given us. You don't need to work for 14 more years under these assumptions.
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